Have an income, get a job

by Mark Corney

Despite the double-dip an extra 236,000 people were in employment between May and July this year compared with the previous quarter.

Good news until the headline figure is broken down.

Only 30% were full-time opportunities, either full-time jobs or full-time self-employment. The majority, 53%, were part-time jobs or part-time self-employment. And a further 10% were on government supported training programmes such as the Work Programme reflecting the failure of participants to be placed in jobs.

At the same time, a third of the new employment opportunities were temporary even though most of them wanted a full-time job.

And so we have an economy which is producing part-time, temporary and self-employment opportunities. But the other side of the coin is the type of people who are filling them.

 Of the 236,000 extra employment opportunities created, 49,000 were taken by those aged 65+. Another 16,000 were 18-24 year olds in full-time education.

In other words, 28% of the new employment opportunities were taken by pensioners and students.

Importantly, however, these groups have something in common: they receive welfare transfers.

Seniors aged 65+ receive a state pension, pension credit or income support. Most full-time students aged 18-24 are in higher education rather than further education and full-time HE students are entitled to maintenance loans and grants.

For 65+ seniors and 18-24 year old students can afford to take part-time jobs because they are in receipt of welfare transfers. Income from part-time jobs ‘top-up’ income from their welfare transfer. They do not need a living wage job that replaces the welfare transfers they receive.

But there is another part of the story. Of the 236,000 employment opportunities created, 126,000 were either part-time jobs or part-time self-employment. Nearly all, however, were taken by women and most say they do not want a full-time job.

The critical question, therefore, is why can women afford to take part-time employment opportunities?

A small proportion is lone parents with young children who are eligible for income support who work part-time to top up their income.

But most are women in partnerships where their partner is also in employment. Men in full-time jobs out-number women by nearly 2:1. In many cases, women in part-time jobs top-up household income where men are working full-time.    

And so the economy is producing the type of jobs which can be taken by people and households which already have an income, such as a pension, a maintenance loan or grant and earnings from the breadwinner.

The economy is failing to produce living-wage jobs for people without these income transfers.

Only growth can produce living wage jobs but in the interim something can be done on welfare transfers.

The Coalition, of course, is concentrating on the benefit system and the introduction of universal credit. Claimants of universal credit will be able to earn much more than they presently do claiming JSA and ESA without losing benefit. Consequently, more people will be able to take the part-time/temporary jobs created by the economy.

And yet there is nothing different in principle between universal credit for unemployed people and maintenance loans/grants for full-time students. Both are a form of welfare transfer.

Introducing maintenance support for full-time FE students aged 18-24 in line with full-time HE students would achieve a win-win: youth unemployment would fall and students could compete with other groups in society for the part-time jobs on offer.

If full-time HE students deserve welfare transfers then so do full-time FE students.

Mark Corney is policy adviser to the Campaign. He writes in a personal capacity.